UBS has posted a smaller-than-expected rise in second-quarter net profit as client activity at its wealth management and investment banking divisions stalled amid tough market conditions.

The Swiss banking giant a net profit of $2.1bn in the three months to 30 June 2022, a rise of 5% from $2.0bn a year earlier.

Total revenue stood at $8.917bn, as against $8.897bn for the same period last year.

Return on tangible equity came in at 16.4%, versus 15.4% a year ago. CET 1 capital ratio, a measure of bank solvency, stood at 14.2% compared to 14.5% in Q1 2021.

Global Wealth Management

UBS Global Wealth Management (GWM) unit reported a pre-tax profit of $1.2bn in Q2 2022, a drop of 2% from $2.5bn in the same period last year.

Net interest income increased by 24% on the back of higher deposit revenues, which were driven by higher deposit margins as well as increased deposit volumes, the bank said.

Investment banking

Investment banking revenues stood at $2.094bn, a slide of 14% from $2.4bn in the same period last year. Global Markets revenues climbed by 10% or $151m while Global Banking revenues reduced by 57%, or $504m.

Operating expenses reduced 5%, largely due to favourable foreign currency effects and lower variable compensation. The company said that this reduction was partially offset by higher expenses on technology and increases across a number of other expense lines.

Asset Management

UBS Asset Management registered total revenues of $1.37m in Q2 2022 compared to $666m an year ago. This included a gain of $848m from the sale of the bank’s shareholding in the Mitsubishi Corp UBS Realty joint venture.

The unit reported net new money outflows of $12bn in the quarter and booked a pre-tax profit of $1.0bn. Invested assets during the quarter accounted for $1.0trn.

UBS Group CEO Ralph Hamers said: “In these uncertain times, we remained close to our clients. We focused on improving our ecosystem and how clients access it.

“This, combined with our strategy, diversified business model and strong balance sheet led to strong reported results and good underlying performance.”

In the previous quarter, UBS recorded a net profit of $2.136bn.